TDM often fails on first attempt and just shows a black screen on the iMac. Getting TDM to work properly often requires multiple attempts to disconnect and reconnect the cable and going out and in of TDM again with fn + F2.

Also, the faintest touch on the cable can inadvertedly make it lose proper connection and have the iMac only display a black screen.

It's also erratic sometimes in it's way of handling audio, where sometimes it will be possible to change audio volume with the function keys, and sometimes not.

Is this behaviour "normal" (and to be expected) or is there something wrong with my cable?

Or is it that my iMac Mid-2011 that uses Thunderbolt v1 is really too slow to handle the video input? When it's actually working, it works just fine without stutters of any kind.

Correct it shouldn't be that unreliable.
– ArchonOSXMar 23 '16 at 19:33

1

The cable was indeed faulty. I'm surprised because it was newly purchased from Apple. But at least now we now why.
– WinterflagsMar 24 '16 at 12:46

Addendum: Now more than a year later, my replacement Thunderbolt cable has become equally unreliable as the first in the OP. Again, this is when using it in Target Display Mode. They become more sensitive with wear & tear (going in and out of the connector every day, and stretching the cable), and some of them might be more sensitive than others straight out of the box – or perhaps I just bought a bad one.
– WinterflagsJul 17 '17 at 6:49

I think it has to do with the timing. Did you connect your Thunderbolt cable before or after your iMac reached the login screen?

I do not know how target display mode is programmed, but I think all sound drivers on your iMac should be initiated first, before you connect the cable.

So when sound is not working, my simple solution is: CmdF2 out of target display mode, disconnect the cable. Wait a few seconds, reconnect is, CmdF2 back into target display mode. It does the job for me.

Next time, make sure your iMac reached the login screen and the hard drive isn't making much noise anymore before connecting your Thunderbolt cable.